Blockchain Papers

Yeray Mezquita, Alfonso González‐Briones, Roberto Casado‐Vara, Pablo Chamoso · 6 authors

Logistics services involve a wide range of transport operations between distributors and clients. Currently, the large number of intermediaries are a challenge for this sector, as it makes all the processes more complicated. This paper proposes a system that uses smart contracts and blockchain technology to remove intermediaries and speed up logistics activities. Our model combines smart contracts and a multi-agent system to improve the current logistics system by increasing organization, security, transparency and significantly improving distribution times.

Andrea Valente, David Atkinson

This study aimed to investigate the conditions in which Bitcoin has developed as a leading cryptocurrency and, according to Nakamoto (2008), could become an instrument for everyday payments around the world. In comparison to other digital payment solutions, Bitcoin is based on a peer-to-peer electronic cash system using “the blockchain”. This innovative technology allows for decentralised storage and movement of currency in a fully anonymous way, introducing advantageous methods for encrypted security and faster transactions (Hagiu & Beach, 2014). Scepticism regards Bitcoin’s foundation, energy consumption and price volatility, however, did not take long to arise (Holthaus, 2017). Ten years from its white paper release, Bitcoin is further supported by the same drivers which could sustain its growth as the future of digital payments (Russo, 2018). In order to investigate the key drivers and feasibility of acceptance, a London based survey was used to understand the desirability of Bitcoin as a day-to-day tool for digital payments. Additionally, this research analysed Bitcoin’s stakeholders and forecast drivers of sustainability for its application to become the future of the payment industry. A space which relies on policies that involve multiple layers of society, governments, regulators and tech-firms, all on a global scale. The findings confirmed how the increasing lack of trust of political and financial institutions, coupled with the increasing cases of data-breaches by tech-firms, encouraged over 70% of respondents to consider more decentralised and anonymous methods for their day-to-day actions; like payments. Policy makers need to cope with societies increasingly separating politically but gathering together digitally (LBS, 2017). For Bitcoin to truly establish itself as a global digital payment solution, key stakeholder acceptance must converge alongside the introduction of more robust regulation.

Hsing‐Chung Chen, Bambang Irawan, Chieh-Yang Shih, Cahya Damarjati · 6 authors

No abstract is available for this record.

Akhil Kumar, Rong Liu, Zhe Shan

ABSTRACT Blockchain technology is based on the idea of a distributed, replicated, and immutable digital ledger that enables parties to conduct business in a trustful and transparent way without the need for a central authority or intermediary. Its most popular application thus far is in payment system applications, e.g., bitcoin. This disruptive technology is expected to contribute significant business value to multiple industry sectors, including supply chain management (SCM), where it can provide greater visibility, accountability and trust in interorganizational business collaboration. In this article, we review some fundamental concepts of Hyperledger Fabric, one of the most mature permissioned blockchain implementations. Further, we use the context of a food supply chain to highlight key design and implementation challenges for blockchain, and provide a strategic assessment of its prospects. Our aim is to dispel misguided notions and myths about blockchain as a silver bullet for all businesses. We believe it is important to penetrate the hype to allow a more realistic understanding of this technology. Blockchain is a high‐cost, high‐overhead storage medium. It is viable only when its higher cost is counterbalanced by the set of benefits that are identified by a careful and thorough analysis of the business. Thus, it will be used mainly for storing important data related to interorganizational transactions among partners where trust is lacking and provenance and visibility are critical. Our paper offers enterprises a systematic way to understand the real costs and risks of blockchain adoption. The insights gained in the SCM context also apply to other areas such as financial services and healthcare that could leverage the full potential of blockchain technology.

Marco Crepaldi

Governance issues limit blockchains' ability to evolve and face unforeseen challenges. It seems possible to argue that this impasse is because most blockchains lack meta-rules. This work considers blockchains as a socio-technical system of rules, in order to draw a comparison with legal systems. Following the comparison, one finds that most blockchains lack what, in legal theory, are considered secondary rules. That is, the meta-rule of the system.

James Grimmelmann

Smart contracts are written in programming languages rather than in natural languages. This might seem to insulate them from ambiguity, because the meaning of a program is determined by technical facts rather than by social ones. It does not. Smart contracts can be ambiguous, too, because technical facts depend on socially determined ones. To give meaning to a computer program, a community of programmers and users must agree on the semantics of the programming language in which it is written. This is a social process, and a review of some famous controversies involving blockchains and smart contracts shows that it regularly creates serious ambiguities. In the most famous case, The DAO hack, more than $150 million in virtual currency turned on the contested semantics of a blockchain-based smart-contract programming language.

Daniel Barati

Proof-of-Storage (PoS) is a collective term for protocols that allow proving data integrity and availability. There exist several PoS schemes. While they differ in detailed specifications, their common primary advantage is eliminating the need for trust between storage providers and data owners. However, there does not exist a mechanism to provide self-emerging delivery of requests for proof of storage, commonly known as challenges.\n\nThis paper presents a decentralized system for PoS using self-emerging challenges built on smart contract in the Ethereum platform. Self-emerging challenges provide an automated mechanism for ensuring integrity and persistence of data at chosen time intervals. The design employs participating nodes in the Ethereum blockchain, commonly referred to as peers, to store and route challenges to storage providers. The peers are compensated for their service by their respective employers. Data owners are enabled to schedule the time of emergence of a challenge to storage providers. Upon a received challenge, storage providers prove the integrity and persistence of data by responding correctly to the challenge. The design builds on the existing work of decentralized self-emerging data systems over Ethereum blockchain networks. We show that this work can be utilized for PoS and solve the problems that the incorporation and adaptation of this work raises.\n\nWe evaluate the proposed system based on several factors. We investigate the security of the system based on the different attacks that the participants may execute for exploitation. Moreover, we evaluate the attractiveness of participating in the system based on the gained remuneration by peers and the positive reputation gained by storage providers for proving the integrity of their clients’ data. We also evaluate the expenses of data owners utilizing the proposed system based on the inherited costs of invoking smart contract functions in the Ethereum platform. Lastly, through analysis, we find that to minimize the total costs in the system, the number of employed peers should be restricted to one in each path. In other words, one peer to deliver a PoS challenge to the storage service provider. We show that this additionally improves the fairness of remuneration payout to peers and analyze how security is affected by always utilizing one peer in each path. We discover that this improves prevention against drop attacks, while it to some degree decreases the prevention of release-ahead attacks which we deem less critical. Through these analyses, we recognize that the benefits greatly outweigh the drawback, and we make a suggestion that data owners should select exactly one peer per path in their services.

Mark Holub, Jackie Johnson

The purpose of this paper is to understand the high Australian dollar Bitcoin prices on LocalBitcoins (localbitcoins.com), which appear to be out of line with market prices.  The findings indicate that the price driver is not a reaction to market conditions, but a consequence of the high risk payment methods deemed acceptable by LocalBitcoins.  With sellers being allowed to offer Bitcoins in exchange for gift card codes, Bitcoin is traded at four to five times the market price.  These trades are typically small in value and the construction of a value-weighted daily Bitcoin price series reveals more accurately LocalBitcoins’ daily price movements.  Benchmarking against CoinDesk’s Bitcoin Price Index (BPI) shows that LocalBitcoins trades can fall above or below this benchmark.  When viewed in relation to the LocalBitcoins two market system, a value-weighted price can be calculated to determine a daily premium and discount.  Value-weighted prices can also be used to compare trades on LocalBitcoins with the more traditional Bitcoin exchange BTC Markets.  These comparisons reveal that prices on LocalBitcoins are not more volatile than prices on BTC Markets or the BPI.  It is recommended that any analysis of price behavior on LocalBitcoins take into account the dollar value of the trades to address the adverse impact that high price-low value trades have on volatility.  Otherwise, a conclusion of high volatility will continue to persist.

Fakhruddin Rizal Batubara, Jolien Ubacht, Marijn Janssen

Blockchain technology is heralded for improving trust and can provide a new approach for creating transparency and promoting accountability of government activities. However, it is still not clear how and in what ways blockchain technologies can improve this. This study examines the mechanisms and capability of blockchain technology to contribute to improved transparency and accountability in government. We use a set of system transparency and accountability concepts and mechanisms to critically assess the capabilities of blockchain. By means of a land registration case in Indonesia, we investigate the effects of blockchain on the transparency and accountability of the system. Creating transparency and accountability might be more difficult than expected, as non-technical issues need to be addressed. Based on our assessment we discuss key issues, including digital ID, privacy, interoperability, connectivity and technology aware population, computational efficiency and storage size, acceptability, check and control mechanism, data validity, digital signature, algorithm transparency, law and regulation support, and dispute resolution, that must be considered in developing a transparent and accountable blockchain-based e-Government system.

Josep Lluís Ferrer Gomila, M. Francisca Hinarejos, Andreu Pere Isern-Deyà

Electronically signing contracts is fundamental for e-commerce transactions. The main property that contract signing protocols must achieve is fairness of the exchange. The solutions presented to date are divided into two major types: those that have a trusted third party (TTP) to achieve fairness and those that do not. In the literature, we find more than 40 published proposals, but none of these proposed protocols has become a recognized or de facto standard in the market. Blockchain has provided a new way to address classic problems such as double spending, as well as problems such as fairness. In this article, we present a protocol for contract signing based on blockchain. Our proposed protocol does not require a conventional TTP, and it does not present the disadvantages of solutions without a TTP (computational and/or communication cost). The protocol satisfies the necessary security requirements: fairness, timeliness and non-repudiation. We demonstrate the feasibility of the protocol with a cost analysis and a proof of concept implementation. In addition, we show how Ethereum can be integrated in our solution as an alternative platform to the use of Bitcoin. Finally, we show how our proposal improves previous solutions for contract signing based on blockchain in terms of cost, efficiency and security.

Yong Tang, Jason Xiong, Rafael Becerril‐Arreola, Lakshmi Iyer

Blockchain is being widely adopted far beyond finance into numerous domains of society and promises unprecedented potential to disrupt organizations, businesses, industries, and economies. However, blockchain is still in its infancy and its future is highly controversial, arousing phenomenal enthusiasm, high expectations, and even intense criticism. The possible impacts of blockchain and its applications on the society could be fundamental and revolutionary, inevitably bringing unpredicted ethical challenges in the foreseeable future. Identifying the ethical challenges of blockchain is urgent and critically needed to ensure that blockchain is adopted ethically. However, discussions on the ethics of blockchain are largely insufficient, which leaves a void of theoretical understanding so far. In this paper, we provide a systematic discussion on the ethics of blockchain applications and map the main social challenges raised by its technology and applications. The paper starts with a review of the technological concepts and applications of blockchain. Then, it overviews the current research on the ethics of technologies and general research on blockchain to briefly introduce the authors' approach. Afterwards, a conceptual model of blockchain ethics research is developed. This research hopes to serve as an initial roadmap for the study of blockchain ethics, and to raise timely awareness and stimulate further debate on the ethics of blockchain in the IS community.

Benjamim Siqueira Amorim, Alessandro Jacomini

O presente artigo objetivou demonstrar como a arbitragem tem o potencial de ser um meio adequado para lidar com conflitos envolvendo a tecnologia blockchain. Para tanto, num primeiro momento, buscou-se delinear os aspectos fundamentais desta nova tecnologia, as mudanças que propõe este fenômeno, destacando-se, dentre suas diversas aplicações, o uso dos smart contracts, analisando-se a sua diferença em relação aos contratos tradicionais, em especial a seus possíveis conflitos que possuem características próprias. É por esse prisma que se desejou analisar as vantagens atuais do uso da arbitragem, e como elas se adequam para lidar com tais litígios. Trata-se de uma abordagem cujo objeto, isto é, a blockchain, ainda está em fase inicial de usos, desenvolvimentos e aplicações, assim, não possui o presente estudo a pretensão de respostas inteiramente conclusivas.

Paolo Tasca, Riccardo Piselli

Abstract Abstract This contribution deals with the problem of interoperability of blockchain technologies. Building on the framework offered by Lawrence Lessig, it will be argued that interoperability cannot be viewed as a simple matter of technological design. Blockchain technologies, in fact, give rise to complex ecosystems, which are shaped by both the architecture and social and market forces. The literature has mainly focused on the effects that the blockchain code has determined on the law of contracts. However, the action of the other modalities, in particular those of market and social forces and their interaction with the code has not been deeply investigated. By isolating the reciprocal effects of the different modalities of regulation—in particular, blockchain code and the law, blockchain code and the market, and blockchain code and social norms—this paper intends to fill this gap and sheds some more light on the internal dynamics of public blockchain. Finally, building on the insight so gained, we will explore the problem of interoperability between ledgers by analysing the pros and cons of the solution proposed so far.

Philipp Hacker, Ioannis Lianos, Georgios Dimitropoulos, Stefan Eich

Abstract This introductory chapter provides an overview of the main legal and policy implications of blockchain technology. It proceeds in four steps. First, the chapter traces the technical and legal evolution of blockchain applications since the early days of Bitcoin, highlighting in particular the political ambitions and tensions that have marked many of these projects from the start. Second, it shows how blockchain applications have created new calculative spaces of financial markets that seek to challenge existing forms of money. Third, it discusses the core points of friction with incumbent legal systems, with a particular focus on the regulability of decentralized systems in general and data protection concerns in particular. Fourth, the chapter provides an outline to the contributions to the volume, which span a wide array of topics at the intersection of blockchain, law, and politics.

Houman B. Shadab

Abstract This chapter provides an overview of how US securities regulation applies to the sale of cryptographic tokens using a distributed ledger, so-called initial coin offerings. Token sale transactions that meet the definition of ‘investment contract’ qualify as regulated securities transactions following the seminal 1946 court decision in the Securities Exchange Commission’s lawsuit against the W. J. Howey company. Currently, there exists substantial legal uncertainty regarding the regulatory classification of token sales involving utility tokens that provide their holders with non-financial, software-based functionality. As implied in a June 2018 speech by a high-ranking SEC official, sales of tokens may initially qualify as regulated securities transactions, yet later fail to qualify as regulated investment contracts if the tokens’ underlying network becomes sufficiently decentralized. Distributed ledger technology is disrupting the nature and operation of early-stage fundraising and access to software services and enabling the sale of digital tokens that operate as a cryptocurrency or provide access to a software service through the use of a blockchain or distributed ledger. The sale of such tokens, so-called initial coin offerings (‘ICOs’), is often in exchange for cryptocurrencies, such as Ethereum or Bitcoin (however, tokens could be sold in exchange for fiat currency). From January to May 2018, globally US$13.7 billion in tokens were sold by 537 companies or projects, an amount greater than all previous time periods combined. This chapter discusses under what circumstances US securities law applies to the sale of such tokens.

Ori Oren

In the summer of 2017, a new method of funding startup businesses exploded from a small capital market to one worth billions. “Initial Coin Offerings” (“ICOs”) can appear to be a simple crowdfunding campaign or a public stock offering at the same time and, until recently, have been conducted with no regulatory oversight. Due to the high risk of fraud, the SEC has begun cracking down on ICOs, requiring many issuers to register their “ICO tokens” as securities or halt trading entirely. This Note looks at the regulatory precedents and factors that the SEC has considered to decide whether a token is a security, and proposes an alternative legal system to securities law that may be better suited for regulating certain types of ICO tokens. This Note concludes that, for ICOs that raise money for a decentralized autonomous organization—in which all token purchasers hold equal management rights—uniform partnership law is the ideal mode of regulation.

Philipp Hacker

Abstract Cryptocurrencies such as Bitcoin or Ethereum are gaining ground not only as alternative modes of payment but also as platforms for financial innovation, particularly through token sales or initial coin offerings (‘ICOs’). All of these ventures are based on decentralized, permissionless blockchain technology, distinguished by their openness to, and the formal equality of, participants. However, recent cryptocurrency crises have shown that these architectures lack robust governance frameworks and are therefore prone to patterns of re-centralization. They are informally dominated by coalitions of powerful players within the cryptocurrency ecosystem who may violate basic rules of the blockchain community without accountability or sanction. This chapter first suggests that cryptocurrency and token-based ecosystems can be fruitfully analysed as complex systems that have been studied for decades in complexity theory and have recently gained prominence in financial regulation, too. It applies these insights to three key case studies: the Bitcoin Hard Fork of 2013; the Ethereum hard fork of 2016, following the DAO hack; and the ongoing Bitcoin scaling debate. Second, the chapter argues that complexity-induced uncertainty can be reduced, and elements of stability and order strengthened, by adapting a corporate governance framework to blockchain-based organizations: cryptocurrencies, and decentralized applications built on top of them via token sales. The resulting ‘comply-or-explain’ approach combines transparency and accountability with the necessary flexibility that allows blockchain developers to continue to experiment for the sake of innovation. Eventually, however, the coordination of these activities may necessitate the establishment of a self-regulatory institution.

Bindu Sivasankar, An Suhail A Neema Sathar

PeerCash is an decentralized application built on Ethereum blockchain technology. Decentralization means that there is no concept of having admin. Blockchain is a decentralized, distributed ledger secured technology which is immutable and verifiable. Every events in blockchain is recorded on blocks and it is encrypted using cryptography hashing. The advantage of PeerCash is that we can completely avoid the middle man from the web shopping payment system. That is we can completely remove the bank from interfering with our payment system and the buyer and seller can directly proceed their transaction and make their purchase. PeerCash transactions is completely recorded on blocks and the transactions is secured. So we can call PeerCash as a cryptocurrency. This paper describes about this application.

Magda Ismail Abdel Mohsin, Aishath Muneeza

This chapter presents the revival of waqf in both its forms – immovable and movable – to demonstrate the potential of waqf in order to integrate it with contemporary fintech innovations like crowdfunding and blockchain. With reference to blockchain technology, which is a decentralised public ledger, it has been used for different applications, from security, shipping, to commercial transactions. WaqfCoin, using modern technology, which integrates crowdfunding and blockchain, will promote charitable endowment. In Malaysia using one of the ten stipulations which is istibdal, an old waqf school was converted into a college known as Al-Mashoor Maahad in Penang. There has been huge support for different schemes through online waqf donation based on the waqf shares model. The practice of creating waqf shares in Muslim-majority as well as Muslim-minority countries provides successful cases in raising funds to meet the different needs of various communities.

Nafis Alam, Abdolhossein Zameni

This chapter provides an insight into the potential usage of fintech in the banking landscape and issues faced by bankers and regulators in regulating the usage of fintech and cryptocurrency, and what the potential areas are where the technology can be misused. It considers how the regulation of technology usage in the financial services landscape is important to avoiding financial crime. The chapter also provides case studies from countries such as Australia, the United States, the United Kingdom and Japan, who are taking a lead in regulating fintech and digital currency usage. It examines an example from Malaysia to demonstrate how a central bank is taking the lead by issuing a fintech regulatory sandbox. Fintech powered by blockchain technology has huge importance for the financial services industry and can come in handy to solve problems such as delays, cost, duplication and reconciliation. Fintech describes financial services using innovative or disruptive technology to enhance customer’s experience.

Volker Nienhaus

The blockchain was introduced as the core technology of the bitcoin concept of Satoshi Nakamoto in 2008. A blockchain is a technique to store, add and validate transaction data in an open computer network by cryptographic techniques in such a way that the correctness, immutability and safety of the data is ensured by a decentralised consensus mechanism. In the bitcoin blockchain, nodes that validate blocks by solving the cryptographic task are called “miners”. For an assessment of bitcoin from a Shari‘ah perspective, it is important to distinguish the coin “bitcoin” from the underlying blockchain or Distributed Ledger Technology. The Ethereum blockchain with Ether as its own token can be considered as a kind of operating system for a wide range of decentralised applications. Developments in the field of blockchains, cryptocurrencies, smart contracts and intelligent agents have attracted the attention of practitioners and proponents of Islamic finance as well as Shari‘ah scholars.

Vinay Thakur, M. N. Doja, Yogesh K. Dwivedi, Tanvir Ahmad · 5 authors

No abstract is available for this record.

Richard Baron, Magali Chaudey

International audience

Jun‐Ho Huh, Seong-Kyu Kim

Efficient information flow in an intelligent system is vital for effectively controlling the entire system. Currently, intelligent systems are used in many industries related to energy production, sustainable agriculture/transport, and intelligent building/cities. Information technology (IT) and information and communication technologies (ICT) play vital roles in introducing technical or technological innovation in these industries as well as establishing a collaborative network. Also, the digitization of existing systems has been quite effective at creating a sustainable global environment as it allows more efficient and well-balanced control of socio-economic factors. However, it has become clear that adopting an intelligent system to achieve innovation, sustainability, and safety may well depend on the quality of the algorithms to be used for that very system. Despite recent controversies, new and renewable energies are considered as a realistic alternative to fossil fuels, which have been integral to modern industries but are regarded as a cause of environmental or economic problems, not to mention their limited deposits. Therefore, since renewable energies will gradually replace existing energy sources but require more time to be fully available, it is essential to find a method of managing them in a fair and transparent way. The United States, Japan, and some European countries are attempting to achieve such a goal by utilizing a blockchain system, but the issues pertaining to its functionality, security, or efficiency have yet to be addressed. This study introduces a viable consensus algorithm (Hyper Delegation Proof of Randomness, or HDPoR algorithm) for blockchain and attempts to validate its parallel computing capability through simulations. This study also attempts to design an efficient but secure peer-to-peer (P2P) transaction service model for these energies for the future where blockchain-based systems will hold a key position in the digitalized world. As its main contribution, this study introduces an effective method of applying blockchain to a new and renewable energy transaction system by presenting a consensus algorithm that can improve its infrastructure and performance.